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July 31, 2010

Rise of the business-savvy engineer

By Rebecca Knight

Published: July 25 2010 20:12 | Last updated: July 25 2010 20:12

Engineers with an eye for business: the Mem gives a grounding in both disciplines

Drew Wenzel, a graduate in engineering sciences, knew that in order to pursue the kind of professional career he wanted, he needed not only a solid engineering education, but also a firm understanding of the business world.

For that, he needed a post-graduate degree, not an MBA, or an engineering degree, but a Masters in Engineering Management. The Mem, a cross between an advanced engineering programme and a general management course, for those who want careers at the intersection of technology and business.

“The Mem degree gives you the ability to speak both languages,” says Mr Wenzel, who recently graduated from Dartmouth’s Thayer School of Engineering and has a job at Google’s headquarters working on its green building designs.

Mr Wenzel is not the only engineering graduate who sees the value of this kind of interdisciplinary degree. While Mem programmes are not particularly widespread – the most notable include combined programmes offered at the business and engineering schools of Cornell, Dartmouth, Duke, Northwestern and Stanford – they are gaining popularity among students and employers.

Joseph Helble, dean of the Thayer School, says Mem programmes are “for engineering grads who know they don’t want to spend their entire careers in design or in a lab. They want to do broader, systems-based engineering, by identifying promising new product lines. They want to create a vision for the technology in the broadest business sense.”

Applications to Northwestern’s Mem programme are up by about 40 per cent on last year. And applications to Dartmouth’s programme have doubled in the past five years; today, the school receives about 300 applications for 50 spots. Typically these programmes target fresh graduates with little professional experience, whereas most MBA programmes require three or four years in the working world.

The degrees are gaining credibility with companies too. In an age of intense global competitive pressure, more companies are striving to maintain an edge over rivals by continuous innovation and effective management of their technology base. This requires a manager who grasps both operations and technology, says Brad Fox, executive director of professional masters programmes at Duke’s Pratt School of Engineering.

“Companies . . . want people with technical depth, but [also] the business breadth that enables them to be successful at their jobs in a corporate environment. We’re really trying to prepare business-savvy engineers,” he says.

The curricula for Mem programmes vary, but most combine advanced engineering courses on integration, manufacturing and supply chain management, with general business classes in subjects such as management, finance and accounting. The result is a well-rounded engineering graduate who can evaluate the commercial potential of innovations in science and technology and also understands financial statements and budgets, according to Mark Turnquist, the director of Cornell’s Mem programme, which graduates 40 students a year.

“Traditionally, engineering grads have been isolated in their technical roles,” he says. “A lot of them hadn’t the faintest idea of how business functions and how organisations work. These kinds of programmes break down those barriers by exposing students to finance so that they understand how the money flows through an organisation.”

Many programmes encourage students to take electives, such as negotiations and competitive strategy, offered at their partner business school so they get better at the “softer skills” of management. Entrepreneurship electives are also popular. These show graduates how to turn research discoveries into marketable applied technologies. They also promote connections between Mem and MBA students to collaborate on an engineering design, or even develop a partnership.

Last year, in one of the worst years in recent history for MBA hiring, Mem recruiting remained strong. Dartmouth’s Mem programme had an 89 per cent job placement rate of candidates within six months of graduation. And Duke, with 200 students in its Mem programme, had a 90 per cent job placement rate within three months of graduation. Recruiters of Mem graduates include, energy companies, financial services companies and management consulting firms.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

The new global opportunity

FORTUNE -- Unless you spend all your time looking at GDP figures, the $58 trillion global economy is almost too big to fathom. In a famous 1995 article in Prospect magazine, the British writer Nico Colchester attempted to make this immense figure more manageable by imagining the world economy as 26 Italys. Italy, he thought, was a convenient unit of account (back then its economy was worth roughly $1 trillion). Besides, all of us sort of know what Italy looks like and makes. As an economy you can picture it.

The world has moved on, the global economy has grown, and these days Colchester's analogy feels a little Eurocentric. Let's update his idea and give it an American twist: Think of the world economy, very roughly, as 32 Californias. (California today is about $1.8 trillion strong.) The U.S. accounts for eight of them; the European Union plus Switzerland and Norway, Canada, Australia, and New Zealand make up another 10½. Prosperous Asia -- that's Japan, South Korea, Taiwan, Hong Kong, and Singapore -- gives you another 3½ Golden States.

That already gets us to 22, meaning the rest of the world -- the BRICs, the whole Islamic world, including its oil-rich states, most of Southeast Asia, all of Latin America, and Africa -- is the equivalent of 10 Californias, with China accounting for about a third of that output.

Now let's divide the world another way: The population in the first group of wealthy countries is about 1.1 billion, or 16% of the world's total. The rest of the world is home to 84% of the planet.

This enormous disparity between the distribution of the world's population and its economic wealth has led to two distinct arguments. First there is the case that global inequality is both wrong and dangerous. It's wrong because we diminish our humanity if we in the rich world allow billions to live stunted and miserable lives when they don't need to; it's dangerous because poverty and disease don't stay confined. When the movement of people, pathogens, and weapons is easier than it has ever been, the resentments, diseases, and grievances of the poor risk making everyone's life miserable.

The second argument is concerned less with morals and security and more with markets. The pragmatist looks at the world and sees 4 billion producers and consumers whose appetites and ingenuity have not been fully tapped -- sees, in other words, huge opportunities for economic growth and corporate earnings.

Though these two theses are often advanced by folks who like debating each other -- antipoverty activists and corporate titans, for example -- there's a growing appreciation that they are not in conflict. As University of Michigan Business School professor C.K. Prahalad argued in his enormously influential book The Fortune at the Bottom of the Pyramid, first published in 2004, "If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity can open up." The opportunity that Prahalad had in mind, it bears stressing, was not just one for corporations; explicitly, he posited that a partnership between businesses and poor people was a better way of helping the poor than conventional poverty-relief policies.

The work of Prahalad, who died suddenly in April at age 68, provides much of the intellectual background to a Global Forum that Fortune is hosting with our corporate cousins Time magazine and CNN in Cape Town on June 26-28. The timing couldn't be better, because the forum will take place right in the middle of soccer's World Cup, a tournament that defines a connected world. On July 11 more people will be doing precisely the same thing at the same time -- watching the cup final on TV -- than has ever been the case in human history. More than 300 leaders of business, government, and civil society will join us at the forum in Cape Town for what Rob Davies, South Africa's minister of trade and industry, calls "the business and economic centerpiece of the World Cup period."

When we were planning the forum, we took as our theme the "new global opportunity," a phrase that is deliberately ambiguous. On the one hand, it illuminates the prospects for businesses as they refine their product offerings for those at the bottom of the pyramid. But this sense of a new global business opportunity was only half of what we meant. As the world emerges from the Great Recession, there is another opportunity, to build a global economy that is more inclusive than it has been -- that brings the benefits of economic growth to those who have been marginalized in the past, whether because of location, social status, or sex.

What will it take to make the new global opportunity happen? Everyone at Cape Town will have his own prescription, but here's mine: China has to keep knocking our socks off, Africa has to catch up, and women have to be recognized as the key to economic success. Let's look at those factors in turn.

In 1987, I wrote an article on the emergence of great companies based in the developing world. It had more than 8,300 words (those were the days), and not one of them was "China." When I mentioned this recently to Michael Enright, a consultant and business professor at Hong Kong University, he pointed out that if I'd written the piece 10 years later, China might still have merited only a sentence.

Times change. Last year there were 37 Chinese companies on the Fortune Global 500, and the number is only going to increase. From oil giants such as CNOOC and Sinopec, to network equipment manufacturers like Huawei and ZTE, to telephone operators like China Mobile, Chinese firms have become household names in the corporate community. China has become a true motor of the global economy -- according to official figures, it grew 8.7% in 2009 and its role as both a market and a supplier of goods and services to the rest of the world is now established. How will it play out?

On the consumption side of the equation, the picture is clear. China is a huge and growing market. It managed its stellar growth in 2009 despite a fall in the value of its exports of 16%, and while part of that success is explained by China's enormous investment in infrastructure, China's domestic consumption patterns turned out to be far more robust than most Western economists had predicted when world trade contracted after September 2008. China has tens of millions of people with oodles of disposable income; a major property developer in China told me recently that a third of the purchasers of his high-end apartments paid cash.

But it isn't just real estate -- long a safe haven for Chinese money anywhere in the world -- that consumers are buying. The real test of China as a market comes when you consider goods and services that you don't expect it to consume. Looked at solely in terms of GDP per head, at $6,000, China is a poor country. But by 2007, according to a report by the research center of Li & Fung, the Hong Kong-based logistics and trading company (itself one of the engines that make globalization go), it was already the world's second-largest market for luxury goods after Japan.

Tapping into that demand, in the past few years Li & Fung's Trinity unit has been buying or licensing high-end European brands such as Cerruti 1881, Gieves & Hawkes, and Hardy Amies, a bespoke tailor on Savile Row in London that was for years known as the Queen's dressmaker. You might think that there would be little demand in China for apparel from companies whose stock-in-trade is silk ties, Oxford college scarves, and blazers. After all, it wasn't long ago that the only suit a Chinese man owned would be a shapeless sack made out of some rough man-made fiber. You'd be wrong. Sunny Wong, Trinity's managing director, told me that just as consumers in the developing world "leapfrogged" the limitations of fixed telephone lines for sophisticated mobile phone services, so Chinese men have bypassed middle-market apparel. They've gone straight from shabby to stylish without stopping at drab. Wong expects the Chinese market for high-end male apparel to continue growing at something like 15% a year.

What about China as a source of innovative products and services? Here the picture is more mixed. Enright says that the vast majority of product innovation in China's technology sector continues to be accounted for by entities that depend on foreign investment. So far only a handful of companies, such as Huawei and ZTE, or Haier, a maker of consumer appliances, compete in advanced markets with established brands, the test that made world-beaters of Japan's branded companies in the 1960s and 1970s.

Enright points out that genuine innovation is starting to be seen in sectors such as coal chemistry and solar power, which makes sense; China is both coal-rich and desperately worried about energy security. With much assistance from the government, Chinese firms such as Suntech Power (STP) are becoming world leaders in solar energy. Western companies, meanwhile, have invested heavily in R&D facilities in China. GE (GE, Fortune 500), in particular, touts its experiences with "reverse innovation," by which products developed for the poor world can be hits in the rich one too. A key example is a portable, PC-based ultrasound machine built originally for the Chinese market, which by late 2007 was being offered at a price point of $15,000, a fraction of what high-end devices cost.

It makes sense to believe that in the next 10 years we will see many more examples of relatively cheap goods produced as a consequence of reverse innovation, and we need to. Most of the world remains poor, so products and processes that are designed with poor people in mind are vital. That's why business journals celebrate the impact of cheap, reliable mobile phones with extraordinarily low costs of use not just in India -- where companies such as the mobile giant Bharti Airtel pioneered the model -- but in much of Africa too.

Africa matters. If China's growth is the epitome of the way the global economy is changing at warp speed and improving the lives of hundreds of millions on the way, then conventional wisdom holds Africa to be its polar opposite. We've long been used to thinking of Africa as a continent scarred by endless wars, disease, and corruption.

That impression is not wholly false. Africa is the world's poorest continent. Living there are some 70% of the world's poorest people. But poverty and despair are far from the whole story. Fueled by buoyant commodity prices, the period before the onset of the Great Recession marked Africa's best period of economic growth in a generation (output grew by more than 6% in 2007 and 2008%) -- and even in 2009 the continent as a whole managed to grow by 2%. The next step is to do something valuable with the resources you've either killed or dug out of the ground.

In 1987, I visited a tannery in Kenya supported by the Aga Khan Fund for Economic Development, which, unusually, was not exporting raw hides but finishing them into high-quality leather for shoemakers in Europe. Keeping the value-added at home, the tannery's manager told me, was vital to its success. Nearly a quarter-century later that's still true. The first step in African development, says Patrick Dupoux, who helped write a new Boston Consulting Group (BCG) report on growing African companies: "Optimize your natural resources. Provide more value-added than you have in the past."

Even if you do that, making a success of business in Africa is hard. Markets are small and fragmented; Africa doesn't provide the domestic scale that Chinese companies can tap into. Transportation is often difficult. The first step for ambitious companies, says Dupoux, is "to go outside their home country." But it isn't easy: Of the 40 companies that BCG identified as "African challengers," 17 are from North Africa (countries such as Morocco and Algeria), just across the Mediterranean Sea from Europe, and 18 from South Africa. The host nation of our forum is the home of the three companies (Anglo-American, SABMiller, and Old Mutual) that the consultancy considered the only African companies that were true global players.

But Dupoux, who is based in Morocco, has absolutely no doubt that a trend toward greater business competitiveness is under way throughout Africa. Poverty demands creativity of entrepreneurs. African companies, the BCG report points out, are "unencumbered by legacy assets and business models." Like those Chinese businessmen leapfrogging into bespoke suits, banks are jumping into electronic banking without ever having built large branch networks.

Economic success doesn't always translate into a healthier country; too often it does little but fuel corruption, as political elites grab all the diamonds, oil, and timber they can. Why do some countries do better than others, even allowing for differences in natural endowments? What really accounts for China's success, for example? Why do experienced observers like Singapore's Minister Mentor Lee Kuan Yew believe that India -- the other giant developing economy -- is only going at "about 60% of China's rate of change"?

It's not because China has more natural resources or skilled bureaucrats or natural entrepreneurs. It's not because India's government is chaotically fragmented, and China's disciplined and much more centralized. (All that is true, by the way.) Hong Kong University's Enright puts his finger on it. "Whenever I'm asked what a country can do to compete with China," he notes, "I say, 'The first thing is, Educate your women.'" Give Mao some credit. Even in the darkest days of unreformed communism, China educated its women, with the consequence that it now has an adult female literacy rate of 90%. India's is just 54.5%.

But if girls and women are really to play their full role in leading nations out of poverty, Maria Eitel, president of the Nike Foundation, argues, education alone is not enough. The real multiplier effect comes from linking education to some sort of economic opportunity. And that has to start early, when girls are in their teens, before they are forced by social and family pressures to marry and have children. If adolescent girls can be helped along the road to economic independence -- given a microloan to buy a cow or a beehive, for example -- then the economic equation for the family changes. A father realizes that it makes more sense for his daughter to stay in school and earn some money on the side, rather than being forced into early marriage. Policy focused on girls, says Eitel, "is uniquely capable of breaking the intergenerational cycles of poverty."

I don't think it is at all coincidental that many of the initiatives that C.K. Prahalad celebrated in The Fortune at the Bottom of the Pyramid had women at their center. Prahalad brought to wider attention companies like Amul in India, the largest processor of raw milk in the world, which depends on women collecting milk from 10,000 villages.

It would honor Prahalad's memory if we could multiply examples like that 10,000-fold. Then we might be able to dimly see the outlines of a world economy in which globalization's benefits did not accrue disproportionately to consumers in the rich world, and in which innovation was not a one-way street, a gift bestowed (on their own terms) by developed nations to those still poor, but rather flowed around the world, benefiting all. That's the new global opportunity. One from which we would all benefit.

The new global opportunity

FORTUNE -- Unless you spend all your time looking at GDP figures, the $58 trillion global economy is almost too big to fathom. In a famous 1995 article in Prospect magazine, the British writer Nico Colchester attempted to make this immense figure more manageable by imagining the world economy as 26 Italys. Italy, he thought, was a convenient unit of account (back then its economy was worth roughly $1 trillion). Besides, all of us sort of know what Italy looks like and makes. As an economy you can picture it.

The world has moved on, the global economy has grown, and these days Colchester's analogy feels a little Eurocentric. Let's update his idea and give it an American twist: Think of the world economy, very roughly, as 32 Californias. (California today is about $1.8 trillion strong.) The U.S. accounts for eight of them; the European Union plus Switzerland and Norway, Canada, Australia, and New Zealand make up another 10½. Prosperous Asia -- that's Japan, South Korea, Taiwan, Hong Kong, and Singapore -- gives you another 3½ Golden States.

That already gets us to 22, meaning the rest of the world -- the BRICs, the whole Islamic world, including its oil-rich states, most of Southeast Asia, all of Latin America, and Africa -- is the equivalent of 10 Californias, with China accounting for about a third of that output.

Now let's divide the world another way: The population in the first group of wealthy countries is about 1.1 billion, or 16% of the world's total. The rest of the world is home to 84% of the planet.

This enormous disparity between the distribution of the world's population and its economic wealth has led to two distinct arguments. First there is the case that global inequality is both wrong and dangerous. It's wrong because we diminish our humanity if we in the rich world allow billions to live stunted and miserable lives when they don't need to; it's dangerous because poverty and disease don't stay confined. When the movement of people, pathogens, and weapons is easier than it has ever been, the resentments, diseases, and grievances of the poor risk making everyone's life miserable.

The second argument is concerned less with morals and security and more with markets. The pragmatist looks at the world and sees 4 billion producers and consumers whose appetites and ingenuity have not been fully tapped -- sees, in other words, huge opportunities for economic growth and corporate earnings.

Though these two theses are often advanced by folks who like debating each other -- antipoverty activists and corporate titans, for example -- there's a growing appreciation that they are not in conflict. As University of Michigan Business School professor C.K. Prahalad argued in his enormously influential book The Fortune at the Bottom of the Pyramid, first published in 2004, "If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity can open up." The opportunity that Prahalad had in mind, it bears stressing, was not just one for corporations; explicitly, he posited that a partnership between businesses and poor people was a better way of helping the poor than conventional poverty-relief policies.

The work of Prahalad, who died suddenly in April at age 68, provides much of the intellectual background to a Global Forum that Fortune is hosting with our corporate cousins Time magazine and CNN in Cape Town on June 26-28. The timing couldn't be better, because the forum will take place right in the middle of soccer's World Cup, a tournament that defines a connected world. On July 11 more people will be doing precisely the same thing at the same time -- watching the cup final on TV -- than has ever been the case in human history. More than 300 leaders of business, government, and civil society will join us at the forum in Cape Town for what Rob Davies, South Africa's minister of trade and industry, calls "the business and economic centerpiece of the World Cup period."

When we were planning the forum, we took as our theme the "new global opportunity," a phrase that is deliberately ambiguous. On the one hand, it illuminates the prospects for businesses as they refine their product offerings for those at the bottom of the pyramid. But this sense of a new global business opportunity was only half of what we meant. As the world emerges from the Great Recession, there is another opportunity, to build a global economy that is more inclusive than it has been -- that brings the benefits of economic growth to those who have been marginalized in the past, whether because of location, social status, or sex.

What will it take to make the new global opportunity happen? Everyone at Cape Town will have his own prescription, but here's mine: China has to keep knocking our socks off, Africa has to catch up, and women have to be recognized as the key to economic success. Let's look at those factors in turn.

In 1987, I wrote an article on the emergence of great companies based in the developing world. It had more than 8,300 words (those were the days), and not one of them was "China." When I mentioned this recently to Michael Enright, a consultant and business professor at Hong Kong University, he pointed out that if I'd written the piece 10 years later, China might still have merited only a sentence.

Times change. Last year there were 37 Chinese companies on the Fortune Global 500, and the number is only going to increase. From oil giants such as CNOOC and Sinopec, to network equipment manufacturers like Huawei and ZTE, to telephone operators like China Mobile, Chinese firms have become household names in the corporate community. China has become a true motor of the global economy -- according to official figures, it grew 8.7% in 2009 and its role as both a market and a supplier of goods and services to the rest of the world is now established. How will it play out?

On the consumption side of the equation, the picture is clear. China is a huge and growing market. It managed its stellar growth in 2009 despite a fall in the value of its exports of 16%, and while part of that success is explained by China's enormous investment in infrastructure, China's domestic consumption patterns turned out to be far more robust than most Western economists had predicted when world trade contracted after September 2008. China has tens of millions of people with oodles of disposable income; a major property developer in China told me recently that a third of the purchasers of his high-end apartments paid cash.

But it isn't just real estate -- long a safe haven for Chinese money anywhere in the world -- that consumers are buying. The real test of China as a market comes when you consider goods and services that you don't expect it to consume. Looked at solely in terms of GDP per head, at $6,000, China is a poor country. But by 2007, according to a report by the research center of Li & Fung, the Hong Kong-based logistics and trading company (itself one of the engines that make globalization go), it was already the world's second-largest market for luxury goods after Japan.

Tapping into that demand, in the past few years Li & Fung's Trinity unit has been buying or licensing high-end European brands such as Cerruti 1881, Gieves & Hawkes, and Hardy Amies, a bespoke tailor on Savile Row in London that was for years known as the Queen's dressmaker. You might think that there would be little demand in China for apparel from companies whose stock-in-trade is silk ties, Oxford college scarves, and blazers. After all, it wasn't long ago that the only suit a Chinese man owned would be a shapeless sack made out of some rough man-made fiber. You'd be wrong. Sunny Wong, Trinity's managing director, told me that just as consumers in the developing world "leapfrogged" the limitations of fixed telephone lines for sophisticated mobile phone services, so Chinese men have bypassed middle-market apparel. They've gone straight from shabby to stylish without stopping at drab. Wong expects the Chinese market for high-end male apparel to continue growing at something like 15% a year.

What about China as a source of innovative products and services? Here the picture is more mixed. Enright says that the vast majority of product innovation in China's technology sector continues to be accounted for by entities that depend on foreign investment. So far only a handful of companies, such as Huawei and ZTE, or Haier, a maker of consumer appliances, compete in advanced markets with established brands, the test that made world-beaters of Japan's branded companies in the 1960s and 1970s.

Enright points out that genuine innovation is starting to be seen in sectors such as coal chemistry and solar power, which makes sense; China is both coal-rich and desperately worried about energy security. With much assistance from the government, Chinese firms such as Suntech Power (STP) are becoming world leaders in solar energy. Western companies, meanwhile, have invested heavily in R&D facilities in China. GE (GE, Fortune 500), in particular, touts its experiences with "reverse innovation," by which products developed for the poor world can be hits in the rich one too. A key example is a portable, PC-based ultrasound machine built originally for the Chinese market, which by late 2007 was being offered at a price point of $15,000, a fraction of what high-end devices cost.

It makes sense to believe that in the next 10 years we will see many more examples of relatively cheap goods produced as a consequence of reverse innovation, and we need to. Most of the world remains poor, so products and processes that are designed with poor people in mind are vital. That's why business journals celebrate the impact of cheap, reliable mobile phones with extraordinarily low costs of use not just in India -- where companies such as the mobile giant Bharti Airtel pioneered the model -- but in much of Africa too.

Africa matters. If China's growth is the epitome of the way the global economy is changing at warp speed and improving the lives of hundreds of millions on the way, then conventional wisdom holds Africa to be its polar opposite. We've long been used to thinking of Africa as a continent scarred by endless wars, disease, and corruption.

That impression is not wholly false. Africa is the world's poorest continent. Living there are some 70% of the world's poorest people. But poverty and despair are far from the whole story. Fueled by buoyant commodity prices, the period before the onset of the Great Recession marked Africa's best period of economic growth in a generation (output grew by more than 6% in 2007 and 2008%) -- and even in 2009 the continent as a whole managed to grow by 2%. The next step is to do something valuable with the resources you've either killed or dug out of the ground.

In 1987, I visited a tannery in Kenya supported by the Aga Khan Fund for Economic Development, which, unusually, was not exporting raw hides but finishing them into high-quality leather for shoemakers in Europe. Keeping the value-added at home, the tannery's manager told me, was vital to its success. Nearly a quarter-century later that's still true. The first step in African development, says Patrick Dupoux, who helped write a new Boston Consulting Group (BCG) report on growing African companies: "Optimize your natural resources. Provide more value-added than you have in the past."

Even if you do that, making a success of business in Africa is hard. Markets are small and fragmented; Africa doesn't provide the domestic scale that Chinese companies can tap into. Transportation is often difficult. The first step for ambitious companies, says Dupoux, is "to go outside their home country." But it isn't easy: Of the 40 companies that BCG identified as "African challengers," 17 are from North Africa (countries such as Morocco and Algeria), just across the Mediterranean Sea from Europe, and 18 from South Africa. The host nation of our forum is the home of the three companies (Anglo-American, SABMiller, and Old Mutual) that the consultancy considered the only African companies that were true global players.

But Dupoux, who is based in Morocco, has absolutely no doubt that a trend toward greater business competitiveness is under way throughout Africa. Poverty demands creativity of entrepreneurs. African companies, the BCG report points out, are "unencumbered by legacy assets and business models." Like those Chinese businessmen leapfrogging into bespoke suits, banks are jumping into electronic banking without ever having built large branch networks.

Economic success doesn't always translate into a healthier country; too often it does little but fuel corruption, as political elites grab all the diamonds, oil, and timber they can. Why do some countries do better than others, even allowing for differences in natural endowments? What really accounts for China's success, for example? Why do experienced observers like Singapore's Minister Mentor Lee Kuan Yew believe that India -- the other giant developing economy -- is only going at "about 60% of China's rate of change"?

It's not because China has more natural resources or skilled bureaucrats or natural entrepreneurs. It's not because India's government is chaotically fragmented, and China's disciplined and much more centralized. (All that is true, by the way.) Hong Kong University's Enright puts his finger on it. "Whenever I'm asked what a country can do to compete with China," he notes, "I say, 'The first thing is, Educate your women.'" Give Mao some credit. Even in the darkest days of unreformed communism, China educated its women, with the consequence that it now has an adult female literacy rate of 90%. India's is just 54.5%.

But if girls and women are really to play their full role in leading nations out of poverty, Maria Eitel, president of the Nike Foundation, argues, education alone is not enough. The real multiplier effect comes from linking education to some sort of economic opportunity. And that has to start early, when girls are in their teens, before they are forced by social and family pressures to marry and have children. If adolescent girls can be helped along the road to economic independence -- given a microloan to buy a cow or a beehive, for example -- then the economic equation for the family changes. A father realizes that it makes more sense for his daughter to stay in school and earn some money on the side, rather than being forced into early marriage. Policy focused on girls, says Eitel, "is uniquely capable of breaking the intergenerational cycles of poverty."

I don't think it is at all coincidental that many of the initiatives that C.K. Prahalad celebrated in The Fortune at the Bottom of the Pyramid had women at their center. Prahalad brought to wider attention companies like Amul in India, the largest processor of raw milk in the world, which depends on women collecting milk from 10,000 villages.

It would honor Prahalad's memory if we could multiply examples like that 10,000-fold. Then we might be able to dimly see the outlines of a world economy in which globalization's benefits did not accrue disproportionately to consumers in the rich world, and in which innovation was not a one-way street, a gift bestowed (on their own terms) by developed nations to those still poor, but rather flowed around the world, benefiting all. That's the new global opportunity. One from which we would all benefit.

I float around in a bag of gas. I got into airships by accident in 1998. I had a pilot’s licence, but I didn’t want to be an airline pilot. That seemed a bit boring. I was working for Virgin Lightships and they sent me out to fly a blimp. I thought, it’s an interesting thing to have on my CV.

There are three Zeppelins in the world today. Only two are flying. I’m the only female pilot. I mostly just fly passengers – 12 at a time. But sometimes we do an event or television coverage.

The coolest thing about airships is it’s a fly-by-feel aircraft, not fly-by-numbers. You do encounter strong winds with this aircraft, and it can get very bumpy up here, like a ship on rough seas. But we’re very careful since we take passengers.

We’re in Silicon Valley, so I’ve flown some famous tech entrepreneurs – Jerry Yang from Yahoo and Steve Wozniak from Apple. I’m always looking down on the nice houses and searching for the perfect weekend cabin.

I love California. The other day we had blue whales off the coast. They were splashing and breaching. It was just magical. Then later in the flight we saw orcas. I put the ship into a low hover and we just watched them play.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

It is easy to see why offices are Petri dishes in which jargon and management fads grow but it isn’t so obvious why they are also the perfect breeding ground for sex and even for love, which thrive in this alien environment.

The office demands that one is guarded and restrained; sex is about being unguarded and unrestrained. Office life requires a suppression of emotion; sex – and love – require just the reverse. Offices demand that everyone is treated on their own merits, while sex and love demand just the opposite: a mad irrational preference for one person over every other.

Yet despite – or because of – the fact that illicit love is the last thing the office was designed for, it is now the most popular place for it in the western world.

Statistics show that variously two-thirds of workers have had sex with a workmate at some point, that one in 10 have had sex with a boss, and that one-quarter meet their future partners in the office.

These stats are, of course, more than usually dodgy. People lie about their office affairs even more than they lie about how many units of alcohol they consume.

---

And now Tom Rachman has written The Imperfectionists, a story of a group of journalists plugging away pointlessly on a doomed newspaper, ignoring the cracks in their careers because the cracks in the rest of their lives are so much bigger.

---

But as I listened I realised this was much more tragic than comic. All six affairs ended badly, some of them horribly so. One ended in divorce. One woman had to leave her job. The rest soldiered on, wounded. Not one had walked off into the sunset hand in hand.

What was compelling about the stories was the madness of it all. With one throw of the dice, these women were compromising their jobs, their home lives and their reputations. I realised that what I was dealing with, even more than tragedy, was mystery. Given how high the risks, and given that everyone agrees it’s always and inevitably a bad idea to have an affair with a colleague, why do people do it?

There seem to be five main reasons, the first of which is proximity: two people are holed up together for most of the waking hours of the day. The second is shared interest – simply by working together people have a great deal in common. Third is boredom: work can be dull and a bit of flirtation can make it considerably less so. The fourth explanation is that to have an affair at work turns out to be terribly easy, and technology makes it easier still. And then there are business trips, company away days and drunken Christmas parties.

But the fifth reason is the oddest. It is that people look at their most alluring at work. They are more capable and more in control, particularly seeming that way to anyone further down the hierarchy. For this reason people end up having office affairs with colleagues they would not otherwise look twice at had they seen them across a crowded room at a party.

But all these reasons still don’t fully explain why sensible people are willing to risk so much. The real answer is that an office affair works like a drug addiction. All but one of my six women said it was not something that they had set out to do. Indeed it was something that they would have been horrified to find that they were capable of. But they were all lulled into it, thinking it harmless and that they could handle it, only to find themselves head over heels and quite out of control.

And once in, their ability to read risk was quite distorted. They simply did not believe that they would be caught. They did not believe it would end badly and that the secret world would be prised open. Yet half of the women I talked to did get caught. And they all got caught in the same way: discovery of e-mails. That very thing that made the affairs seem so secret and so safe – the private little bubble of messages silently sent to and from – turns out to be the most dangerous of them all.

===

Lucy Kellaway on office romance

By Lucy Kellaway

Published: April 30 2010 15:21 | Last updated: April 30 2010 15:21

It was the graveyard slot just after lunch and the bankers assembled in the ballroom of a London hotel were sleepy. The middle-aged woman in the seat next to me – who was to be one of the afternoon’s speakers – was surreptitiously sending e-mails on her BlackBerry. Bored, I glanced across and saw that the messages going to and fro were composed predominantly of kisses. I positioned my head so that I could see more and was rewarded by the discovery that the other side of this conversation appeared to be in the room. The e-mail exchange was an (unflattering) running commentary on the current speaker, leavened with endearments and lascivious thoughts and a plotted assignation once her speech was over.

I turned around to see if I could spot the man equally engaged with his BlackBerry but half the audience seemed to be prodding at gadgets in their laps, their faces all blank and blameless.

The speaker was coming to a lacklustre close and my neighbour calmly got up, positioned herself at the lectern and proceeded to give a presentation on the success of diversity policies at her bank.

Mostly her colleagues looked on with the sort of torpor that comes over an audience at 3pm when listening to a talk on diversity. But I was riveted. She struck me as both perfectly ordinary and perfectly professional; nondescript in a plain trouser suit and clicking through her PowerPoint slides with total conviction.

Since then I have thought about her often. I have thought about her in meetings and in offices when everybody is doing what they are supposed to be doing. And I’ve wondered: who are they really e-mailing? What are they really thinking? What is going on beneath all that quiet, seemly behaviour?

Offices are the strangest of places. They are where the bulk of western humanity spends the bulk of its time, following rules that do not come naturally. Armies of workers turn up to work at a certain time, dressed in a uniform, and behave in a proscribed fashion. Under these conditions it is perhaps not surprising that all sorts of dysfunctional things start to happen.

In the past 15 years at the Financial Times I’ve become an expert on the weirdness of office life, writing about the lengths people go to in order to bend themselves into the right shape for office survival. For the past 10 I’ve written a fictional column about a male executive as he goes up the ladders and down the snakes of corporate life. Martin Lukes understands better than most that to do well in the office you cannot talk or think or behave in a natural way and therefore, like the real executives he is based on, he talks in out-of-the-box business jargon, 24/7.

It is easy to see why offices are Petri dishes in which jargon and management fads grow but it isn’t so obvious why they are also the perfect breeding ground for sex and even for love, which thrive in this alien environment.

The office demands that one is guarded and restrained; sex is about being unguarded and unrestrained. Office life requires a suppression of emotion; sex – and love – require just the reverse. Offices demand that everyone is treated on their own merits, while sex and love demand just the opposite: a mad irrational preference for one person over every other.

Yet despite – or because of – the fact that illicit love is the last thing the office was designed for, it is now the most popular place for it in the western world.

Statistics show that variously two-thirds of workers have had sex with a workmate at some point, that one in 10 have had sex with a boss, and that one-quarter meet their future partners in the office.

These stats are, of course, more than usually dodgy. People lie about their office affairs even more than they lie about how many units of alcohol they consume.

I met my own husband at the FT and, in the early stages of our relationship, used to lie through my teeth. I remember the surreal transition from being workmates to lovers and how I found it quite impossible to admit to colleagues that David and I were going out – if that indeed is the right term for a romance that blossomed in a windowless, dirty newsroom. Almost certainly everyone knew anyway, otherwise why was he endlessly phoning me from across a crowded room pretending to be an irate captain of industry incensed at whatever I’d written in the paper that morning? And why was he so gleeful when I started blushing and stammering?

It now seems silly to have been so coy given that we were young and equals and unmarried. By contrast, the woman at the conference was not young. And judging by her comments on multitasking, she appeared to be married with children and the man to whom she was sending e-mails was most certainly not her husband.

She, it seemed to me, was living at the extreme point where the professional and the personal collide. Everything that was demanded from her as a responsible senior banker was at odds with what was happening in her personal life. This situation, I thought as I watched her calmly give that presentation, was begging for fictional treatment.

What is so strange is that this material features so little in novels. The armies of commuters who travel to and from work on trains and Tubes may have in their hearts romantic yearnings towards a colleague but they have their noses in love stories that are more likely to be taking place in a leper colony in Greece or in the court of Henry VIII than in a modern-day office.

The reason that this richest of seams has been mined so inadequately is probably that the sort of people who write romantic novels don’t work in offices. In fairness, neither do they work with Greek lepers or 16th-century courtiers but, as the readers don’t either, the writers may feel at less of a comparative disadvantage than dicing with the contemporary workplace.

Indeed, there aren’t many literary novels set in the office either, perhaps for the same reason. By far the most famous and still the best book about the office is Something Happened (1974), Joseph Heller’s account of a miserable manager who loathes his wife – who is a drunken flirt – his retarded son and conniving daughter. He hates and is bored by his job and works in an office where everyone fears the people above them on the ladder and is feared by those below. Yet the most feared person of all is a half-mad typist who hasn’t got the hang of disguising her feelings. They dread that one day she’ll go crazy in the office, because that would be embarrassing and embarrassment can’t be tolerated.

The thread of how the office infantalises us and makes us powerless was picked up 30 years later by Joshua Ferris in Then We Came To The End (2007), a study of boredom and disaffection in an advertising agency. And now Tom Rachman has written The Imperfectionists, a story of a group of journalists plugging away pointlessly on a doomed newspaper, ignoring the cracks in their careers because the cracks in the rest of their lives are so much bigger.

In all three books, work is mostly boring and hateful and pointless but it is also a distraction from the greater pain that takes place outside work; the office, despite being mostly disagreeable, can be the best sort of refuge.

Yet I wanted to write something different: a novel in which the emotional tumult of life was going on in the same place as the work. Where the office wasn’t a place to escape to, it was the focus both of the personal anguish as well as the professional calm.

This time, I decided to tackle the subject as a woman. Not only was this the easy option, being one myself, but after having cross-dressed as Martin Lukes for a decade, I needed a break. Martin has no emotional intelligence and no self-knowledge and is so endlessly boastful, I found myself longing to reinvent myself as a pair of women, one of whom was lacking in confidence and the other with rather too much emotion for her own good.

The problem with this, I soon realised, is that being female is somehow less funny than being male. A man who doesn’t know himself is stiff with comic potential, while a woman who is well aware of the mess she is getting into might be mad or sad or wayward but she’s not particularly funny.

When I started on this project a couple of years ago I had been excited by the slapstick possibilities of office affairs. Who can ever forget the way that the then deputy governor of the Bank of England, Rupert Pennant-Rea, was exposed as having conducted an affair in Threadneedle Street? And then there are all the ludicrous trappings of an office romance: the hilarious Christmas parties, the scope for double entendres and misapprehension, with the comedy afforded by CCTV cameras and misdirected e-mails – all of which surely lead to a novel as funny as a Carry On film.

Yet the more I looked into it, the blacker the humour became. In researching the book I assembled a group of half a dozen women, each of whom had had an office affair, and who, after a bit of coaxing and reassurance that I wasn’t about to blurt out their secrets, seemed willing to spill their stories in all their gory detail. But as I listened I realised this was much more tragic than comic. All six affairs ended badly, some of them horribly so. One ended in divorce. One woman had to leave her job. The rest soldiered on, wounded. Not one had walked off into the sunset hand in hand.

What was compelling about the stories was the madness of it all. With one throw of the dice, these women were compromising their jobs, their home lives and their reputations. I realised that what I was dealing with, even more than tragedy, was mystery. Given how high the risks, and given that everyone agrees it’s always and inevitably a bad idea to have an affair with a colleague, why do people do it?

There seem to be five main reasons, the first of which is proximity: two people are holed up together for most of the waking hours of the day. The second is shared interest – simply by working together people have a great deal in common. Third is boredom: work can be dull and a bit of flirtation can make it considerably less so. The fourth explanation is that to have an affair at work turns out to be terribly easy, and technology makes it easier still. And then there are business trips, company away days and drunken Christmas parties.

But the fifth reason is the oddest. It is that people look at their most alluring at work. They are more capable and more in control, particularly seeming that way to anyone further down the hierarchy. For this reason people end up having office affairs with colleagues they would not otherwise look twice at had they seen them across a crowded room at a party.

But all these reasons still don’t fully explain why sensible people are willing to risk so much. The real answer is that an office affair works like a drug addiction. All but one of my six women said it was not something that they had set out to do. Indeed it was something that they would have been horrified to find that they were capable of. But they were all lulled into it, thinking it harmless and that they could handle it, only to find themselves head over heels and quite out of control.

And once in, their ability to read risk was quite distorted. They simply did not believe that they would be caught. They did not believe it would end badly and that the secret world would be prised open. Yet half of the women I talked to did get caught. And they all got caught in the same way: discovery of e-mails. That very thing that made the affairs seem so secret and so safe – the private little bubble of messages silently sent to and from – turns out to be the most dangerous of them all.

Lucy Kellaway is an FT columnist. Her book ‘In Office Hours’ (£12.99, Fig Tree) is published on May 6. To buy at the discounted price of £10.39 plus p&p, call the FT ordering service on 0870 429 5884 or go towww.ft.com/bookshop

July 30, 2010

c

By Lynda Gratton

Published: July 25 2010 20:11 | Last updated: July 25 2010 20:11

.....

It feels to me that in the world of work, a similar calm has descended. We are in a state of in-between.

....

halfway through a four-year research project involving academics and executives from across the world to try to figure out which direction we are heading in and how it will affect the nature of work. Based on our study, here are some clues on the big challenges.

● Most corporations have hung on to command and control structures, with hierarchical decision-making protocols and a reliance on strategic direction from the top.

But how will that play out when the connections between people across the world are stronger than the connection they have with their company?

What happens when, within 10 years, more than 9bn people will be actively connecting to each other and engaging in purposeful creation online? It could shift the balance of power from within companies to the microentrepreneurial-rich ecosystems that will increasingly dominate their value chains.

● The baby boomers generation has pretty much been in control of the corporate agenda for the past 20 years. They are ambitious, competitive, like to work with other senior men, prefer their wives to be at home, and believe that getting to the top is their final ambition.

But what will happen when generation Y, a group now in their mid-20s, takes control? They want work-life balance (yes, even if they are in Mumbai or Shanghai), they consider spending time with their future children as a premium, and they tend to be co-operative and empathetic.

This could create a shift from valuing careers that propel you to the top to valuing careers that enable a more balanced and creative life.

● Developed economies have had a near monopoly on research and development spending and the high-value innovations that flow from this; the product may have been made in China but you can be sure it was designed in California.

So what happens when the frugal innovations from emerging markets begin to look a lot more exciting, when even old timers move their labs to Bangalore and when more of the Indian and Chinese diasporas move home?

Expect disarray in the classic western talent pipelines and a dash for Asian talent.

● The carbon footprints of US and European employees and consumers have dwarfed the rest of the world’s for decades. Commuting to work has eaten up much of that and, combined with a taste for inexpensive manufactured goods shipped across the world, has had a growing impact on the environment.

What happens when Chinese and Indian employees and consumers (and by 2020 there will be 3bn of them) get the same taste for fossil fuels and consumption?

Suddenly, it looks like a challenge that will require a level of global co-operation never before witnessed.

● Employees have tended to have some trust in their companies, their governments and their communities. The deal was that they worked hard to make money to buy stuff that made them happy.

Plus, they spent about 20 hours a week of their leisure time watching television. But what happens when institutional trust ebbs, when it seems that the wealthy are no happier and we now replace a couple of hours of television with connecting creatively with billions of other people online?

Perhaps it is these billions of potential grassroots activists and workers that will make a real difference.

...

The writer is a professor of management practice at London Business School

The birth of the summer blockbuster

It was a bright spring day in 1970s Hollywood and a studio chief, walking down his executive corridor, overheard a conversation behind the office door of his vice-president for marketing.

Woody from ‘Toy Story’

“We’ve got all these blockbusters coming up over the next year,” the VP was saying.

“Some are blockbusters,” said the junior honcho closeted with him.

The studio chief lit up like a flashbulb. “Summer blockbusters!” (he thought he had heard). He had never encountered so novel an idea. One so brilliant, so counter-intuitive, so filled with – with potential money. He charged into the office, promoted Junior to Senior Executive Officer for Brainstorms, and everything else is history. (Except this story, which is industry folklore.)

How else to explain that at a certain point in the mid-1970s our filmgoing habits suddenly changed? Back then June, July and August were the movie industry’s low season. By day, everyone was on the beach; by night, eating, drinking, dancing and carrying on. Who wanted to go rectangle-eyed in the dark, watching movies? That was a winter thing. The only steady summer dollars came, in the US, from drive-in theatres, and even their postwar heyday was faltering by the 1970s, assailed by charges of seediness. Too little movie-watching in darkness-veiled parked cars, too much making out.

Today there are fewer drive-ins but summer multiplexes are filled with blockbusters, fantasy epics, top-dollar sequels. The money that comes into a studio one year goes out again the next, to its favourite sons, the filmmakers. Christopher Dark Knight Nolan is handed $170m to make this year’s Inception. The makers of Toy Story 3 have a piggybank of $190m.

This summer the likes of Shrek Forever After and Knight and Day (Tom Cruise/Cameron Diaz spy rom-com) are backed up by titles that promise fantastical screen jiggery-pokery – The Last Airbender and The Sorcerer’s Apprentice (Nicolas Cage vehicle, not Mickey Mouse version). There is also our current, weird obsession with the 1980s, the mothering decade of machismo movies: The Expendables (hulk-crammed vehicle for Stallone, Schwarzenegger, Willis and Co); The A-Team; The Karate Kid.

Most of these movies share a set of assumptions. It is reasonable to expect the spectator to bring a body and two senses: sight, hearing. It is unreasonable to expect him to bring a brain. The movies must be big on action, glamour, stars, spectacle, novelty (though not too much of that), but light on cognitive demands. This is vacation time, after all.

The summer blockbuster was born on June 20 1975, when Jaws opened wide. The movie and its bestselling source novel by Peter Benchley, published the previous year, were ideal for summer customers, for all those human beach towels ready to be scared off the beaches. Jaws producer David Brown admitted: “The release of the film was deliberately delayed till people were in the water off the summer beach resorts.”

The makers and the studio, Universal, sensed the occasion and opportunity. Three times the normal number of press and media interviews were given during the shooting of Jaws. At a Long Beach sneak preview, Universal moguls Lew Wasserman and Sidney Sheinberg tape-recorded the enthusiastic audience reaction and then launched an unprecedented $700,000 worth of TV advertising on 211m homes. Add stunt publicity such as special Jaws ice-cream flavours – “finnilla”, “jawberry”, “sharkalate” – and no one was surprised that, after 11 weeks on screen, Jaws was the highest-earning film in North American history.

Jaws also gave audiences the ultimate thrill ride. Chased by a shark? You can’t get more adrenalised than that. The audience lived the drama with the embattled characters played by Roy Scheider, Richard Dreyfuss and Robert Shaw. Spielberg would later match his Great White with all-but-man-eating Nazis in the Indiana Jones saga and dinosaurs in the Jurassic Park series. Jaws had given him the template for the perfect blockbuster. Create a colossal baddie (human or animal) and a colossal hero, or at least a colourfully beleaguered crew of would-be heroes, follow by natural law.

In the years after Jaws, the entire release calendar changed. What had been a novelty became a habit; especially when Star Wars, two years on from Jaws, repeated the magic. The smash-hit opening for George Lucas’s film in May 1977 turned a small-budget sci-fi sleeper into a wake-up call for the industry. The second and third Star Wars films opened at three-year intervals – The Empire Strikes Back in May 1980, Return of the Jedi in May 1983 – and the blockbusting movie franchise was born.

Every filmgoer climbed aboard the carousel. From Star Wars (1977) to Die Hard (1988) to Batman (1989) to Jurassic Park (1993), through one-offs such as Top Gun (1986) and Independence Day (1996) – a previously untapped summer audience was tapped senseless. Depending on when you boarded this carousel, you were a child of the shark age, the Skywalker age, the space age or the Digisaurus age. Semiologists and sociologists scratch their heads over why different ages respond to different story trends. Probable answer? Hollywood tells them to. Or technology says, “Now is the time” (as with photo-realistic dinosaurs).

Though some smash-hits stubbornly cling to winter openings (Titanic and Avatar were both Christmas season hits), the summer mainly sets the fashions and rings the tills. It has done so ever since studios realised the movie-going demographic was getting younger – there are more teenagers in America today than ever – and that school vacation time was a desert of idleness waiting to be made fertile.

In the process the term “blockbuster”, defined by size of revenue rather than size of budget, proved it wasn’t even restricted to the action-adventure, the epic, the big-budget fantasy. A comedy could be a blockbuster. It could win audiences even by making fun of the summer blockbuster.

In July 1980 a little film called Airplane! opened. Costing $3m to make, it took $83m, becoming one of the highest-flying comedies of all time. One of its three directors was Jerry Zucker. (The others were Zucker’s brother David and Jim Abrahams.)

“We took it round a lot of studios who turned it down. Finally Paramount liked it, though they tried to get other people to direct it,” says Zucker. The trio persevered. Having written it together, they wanted to direct it together.

“The first studio preview at Paramount was a disaster,” he continues. “They pulled people in off the lot. No one laughed except for one guy who was hysterical throughout. Then we previewed it ourselves in college campuses and gave out free tickets. Word of mouth grew. And the trailer played really well.” (It featured a mini-spoof of Jaws, with the plane nosing through clouds to the ominous, oom-pah shark theme).

The summer “blockbuster” could be anything: that was clear, or is now. Who could have predicted some of the high-season hits that have entered Hollywood’s history book? A multi-instalment religious allegory for kids? (The Chronicles of Narnia.) A pirate adventure built around a star, Johnny Depp, who insists on delivering a camp impersonation of Rolling Stones guitarist Keith Richards? If a film crashes the record books, that is enough.

So $200m is piled into Shrek Forever After or $300m into Alice in Wonderland 3D, in the faith they will return $500m and $750m respectively. Two and a half times your investment, goes the Hollywood accounting wisdom, is black ink.

Another industry wisdom is that filmgoers want more of the same. So every summer brings a salvo of sequels. The titles resemble football results. This year’s, if simplified to names and numbers, would read: Sex and the City 2, Iron Man 2; Twilight 3, Shrek 4; Toy Story 3(D), Piranha 3(D).

Hollywood has become craftier with spin-offs. It no longer rubber-stamps rubber sharks swimming in diminishing circles of audience feeding frenzy, as with the infamous Jaws sequels. As Steven Spielberg (who directed none of the follow-ups) once told me: “In my hands Jaws 2, 3 and 4, if I had made them, still would have failed because of the improbability of a shark that large occurring thrice. The audience will only accept so much until it becomes hooey.”

Now pains are taken to immunise sequels against the ridiculous. Ingenious time-games, including prequels, or new injections of star power (Sean Connery coming in as Indiana Jones’s dad) freshen the formula. Yet repetition is still part of the charm. Whoever said, long ago, that movie theatres were the new cathedrals was right. Audiences like liturgies. They like trooping into large, umbrageous buildings where everyone delivers the same responses and seeks to experience the same raptures. They await the awesome, the unintelligible, the transcendent. Instead of God, it is dinosaurs, space monsters, vampires, digimated swamp ogres. Whatever we cannot understand will make us strong.

But audiences want something different as well as the same, the same as well as different. Hollywood has to keep squaring the circle. If a movie surprises, or defies expectation, so much the better. Let it surprise again. Let novelty and ritual be served on the same plate. Next year Pirates of the Caribbean 4 will arrive, the first film ever to have auditioned its actresses with a “jigging” test to determine the silicone-free authenticity of their breasts. Men in Black 3 will arrive, slotted in for Memorial Day. The difference this time for the FBI-versus-extraterrestrials saga? Yes, 3D. The aliens will land in our laps.

A lot of water has passed under a lot of monster-hunting adventures since Jaws. Yet its legacy lives on. Steven Spielberg still works. And though two Jaws stars have died, Shaw and Scheider, to discover the third you need only check out this year’s Piranha 3D. There he is. Richard Dreyfuss. Still acting, still fishing. For the story of the summer blockbuster is the greatest true-life fisherman’s yarn of all, one that just gets longer and just gets bigger.

.............................

The five biggest summer blockbusters

1. The Dark Knight July 2008)

Takings: $533.3m

In brief: Batman’s (Christian Bale) war on crime against sinister mastermind The Joker (Heath Ledger) is complicated when district attorney Harvey Dent (Aaron Eckhart) and he fall for the same girl, played by Maggie Gyllenhaal. Ledger’s posthumous appearance, six months after his death, undoubtedly enhances the film’s must-see appeal, writes Kirsty Blake-Knox.

2. Star Wars: Episode IV – A New Hope (May 1977)

Takings: $460.9m

In brief: Luke Skywalker (Mark Hamill) joins Han Solo (Harrison Ford) and a cast of mechanical misfits in a bid to rescue rebel leader Princess Leia (Carrie Fisher) from the clutches of Darth Vader’s empire. Box-office triumph results in a franchise spanning more than 30 years and Leia became every sci-fi geek’s fantasy woman.

3. Shrek 2 (May 2004)

Takings: $436.7m

In brief: newlywed ogres Fiona and Shrek run into marital difficulties when Shrek meets his in-laws, the King and Queen of Far, Far Away. Dangerous adventures ensue, involving wisecracking donkeys, breakdancing pigs and Antonio Banderas.

Out of this world

4. E.T. (June 1982)

Takings: $434.9m

In brief: ‘Jaws’ creator Spielberg brings us an alien who is sheltered from the US government by a 10-year-old boy. After an airborne bike ride and a series of fancy dress moments, E.T. finally gets his wish to “go home”.

5. Star Wars: Episode I – The Phantom Menace (May 1999)

Takings: $431.1m

In brief: The first of three “prequels”, chronicling an age before Luke Skywalker and dated special effects. Despite huge takings the film received tepid reviews from Star Wars fans.

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When a high salary is right in our age of austerity

By Michael Skapinker

Published: July 16 2010 23:34 | Last updated: July 16 2010 23:34

It was a classic British tabloid storm. A story broke of a public servant receiving an exorbitant salary. Trade unions voiced fury at how much more he earned than their struggling members. The government, learning that the miscreant took home more than the prime minister, promised to put a stop to it. Reporters went in search of outraged quotes from members of the public.

There was a twist, however. The alleged fat cat was not a member of parliament or a government mandarin but a primary school headteacher.

“Parents and teachers spoke of their shock and anger last night,” said the Daily Express at the revelation this week that Mark Elms, head of Tidemill primary school in Lewisham, south London, earned £276,523 last year. “I was very shocked when I heard how much he gets paid,” said Adriana Patino, a school parent.

Then the story departed even further from the usual script. Other parents refused to be shocked. “I think he’s worth a whole lot more,” one told Metro, the London freesheet. “He’s excellent,” Jodie Golding, another local mother, told The Sun.

In this time of austerity how much top people earn, whether in the private or public sector, has been a source of furious controversy worldwide. The European parliament this month approved tough new rules on bankers’ bonuses. Bankers’ pay has been heavily criticised by Angela Merkel, Germany’s chancellor, and Nicolas Sarkozy, the French president. Lloyd Blankfein, head of Goldman Sachs, has conceded that much of the anger was “understandable and appropriate” and Richard Lambert, director-general of the CBI, the British employers’ organisation, warned that highly paid executives risked being seen as “aliens” by an angry public.

With civil servants facing pay freezes or skimpy rises, there is little tolerance either for top public officials earning large amounts. So, why have the tabloids struggled to whip up much of a storm over Mr Elms?

When people complain of the unfairness of top people’s pay, they generally feel aggrieved by two things. The first is that so many of the highest earners do not seem worth it. Those millions in salary and bonuses paid at financial institutions that collapsed came to be seen as rewards for failure. Hence the anger over the large pension paid to Sir Fred Goodwin, ousted chief executive of the Royal Bank of Scotland, or the $480m that Richard Fuld took home over eight years as head of Lehman Brothers.

As a headteacher, by contrast, Mr Elms is no failure. Tidemill is a difficult school. When he took over in 2001, it was in “special measures” – official jargon for “failing”. A high proportion of pupils come from non-English-speaking homes. Much of the student body is transient. The number with learning difficulties is above average.

Yet the advances children have made under Mr Elms’s leadership are astonishing. Arriving with well below par academic skills, they now leave matching the national averages in English and mathematics and exceeding them in science. In its most recent report, in 2008, Ofsted, the inspection service, paid tribute to “the outstanding social and emotional development of pupils [which] results in a happy community”.

The inspectors called the school “outstanding” and awarded the same accolade, its highest, to Mr Elms. “He is experienced, enthusiastic and innovative,” Ofsted said. No wonder those parents could not bring themselves to criticise him.

The second source of so much dissatisfaction with high earners, even when they are successful, is how much more they take home than those they lead. In the UK, chief executives of the 100 largest companies last year earned 81 times more than the average of all full-time employees, according to Incomes Data Services. In the US, corporate leaders earned 319 times more than the average worker in 2008 (although this was down from 525 times in 2000), the AFL-CIO trade union federation said.

To many, this is what really rankles. Admittedly, company bosses lead stressful lives. They are subject to constant public scrutiny, have to spend evenings and weekends at corporate events, and struggle to spend time with their families. But it is hard to argue that their contribution is that many multiples more important than that of their junior colleagues.

How much more did Mr Elms earn than his teaching staff? First, you need to deconstruct the figure that appeared in the press this week. His basic annual salary is £82,700. That is a little over three times what a newly qualified central London teacher earns. Much of the rest of his pay was earned over two years rather than one. A large amount of it came from his work on a programme in which he helped other poorly performing schools. Given his exceptional performance, this hardly seems excessive.

Still, Michael Gove, the education secretary, has declared that no headteacher should earn more than the prime minister’s £142,500. But why not? The premier’s current salary is only a down payment on his earning power once he leaves office. There are all those paid speaking engagements, to come, as well as directorships. None of that is available to the retiring headteacher.

Second, David Cameron has been in office only since May. He has yet to prove that he can be even fractionally as effective as Mr Elms or provide anything like the headteacher’s return on taxpayers’ investment.

Think of all those once under­performing pupils that Mr Elms has almost certainly set on a path to productive employment rather than the dole, to contributing to the community rather than being a nuisance to it. The question should not be whether Mr Elms is paid too much but where, at that price, we can find a lot more like him.

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When a high salary is right in our age of austerity

By Michael Skapinker

Published: July 16 2010 23:34 | Last updated: July 16 2010 23:34

It was a classic British tabloid storm. A story broke of a public servant receiving an exorbitant salary. Trade unions voiced fury at how much more he earned than their struggling members. The government, learning that the miscreant took home more than the prime minister, promised to put a stop to it. Reporters went in search of outraged quotes from members of the public.

There was a twist, however. The alleged fat cat was not a member of parliament or a government mandarin but a primary school headteacher.

“Parents and teachers spoke of their shock and anger last night,” said the Daily Express at the revelation this week that Mark Elms, head of Tidemill primary school in Lewisham, south London, earned £276,523 last year. “I was very shocked when I heard how much he gets paid,” said Adriana Patino, a school parent.

Then the story departed even further from the usual script. Other parents refused to be shocked. “I think he’s worth a whole lot more,” one told Metro, the London freesheet. “He’s excellent,” Jodie Golding, another local mother, told The Sun.

In this time of austerity how much top people earn, whether in the private or public sector, has been a source of furious controversy worldwide. The European parliament this month approved tough new rules on bankers’ bonuses. Bankers’ pay has been heavily criticised by Angela Merkel, Germany’s chancellor, and Nicolas Sarkozy, the French president. Lloyd Blankfein, head of Goldman Sachs, has conceded that much of the anger was “understandable and appropriate” and Richard Lambert, director-general of the CBI, the British employers’ organisation, warned that highly paid executives risked being seen as “aliens” by an angry public.

With civil servants facing pay freezes or skimpy rises, there is little tolerance either for top public officials earning large amounts. So, why have the tabloids struggled to whip up much of a storm over Mr Elms?

When people complain of the unfairness of top people’s pay, they generally feel aggrieved by two things. The first is that so many of the highest earners do not seem worth it. Those millions in salary and bonuses paid at financial institutions that collapsed came to be seen as rewards for failure. Hence the anger over the large pension paid to Sir Fred Goodwin, ousted chief executive of the Royal Bank of Scotland, or the $480m that Richard Fuld took home over eight years as head of Lehman Brothers.

As a headteacher, by contrast, Mr Elms is no failure. Tidemill is a difficult school. When he took over in 2001, it was in “special measures” – official jargon for “failing”. A high proportion of pupils come from non-English-speaking homes. Much of the student body is transient. The number with learning difficulties is above average.

Yet the advances children have made under Mr Elms’s leadership are astonishing. Arriving with well below par academic skills, they now leave matching the national averages in English and mathematics and exceeding them in science. In its most recent report, in 2008, Ofsted, the inspection service, paid tribute to “the outstanding social and emotional development of pupils [which] results in a happy community”.

The inspectors called the school “outstanding” and awarded the same accolade, its highest, to Mr Elms. “He is experienced, enthusiastic and innovative,” Ofsted said. No wonder those parents could not bring themselves to criticise him.

The second source of so much dissatisfaction with high earners, even when they are successful, is how much more they take home than those they lead. In the UK, chief executives of the 100 largest companies last year earned 81 times more than the average of all full-time employees, according to Incomes Data Services. In the US, corporate leaders earned 319 times more than the average worker in 2008 (although this was down from 525 times in 2000), the AFL-CIO trade union federation said.

To many, this is what really rankles. Admittedly, company bosses lead stressful lives. They are subject to constant public scrutiny, have to spend evenings and weekends at corporate events, and struggle to spend time with their families. But it is hard to argue that their contribution is that many multiples more important than that of their junior colleagues.

How much more did Mr Elms earn than his teaching staff? First, you need to deconstruct the figure that appeared in the press this week. His basic annual salary is £82,700. That is a little over three times what a newly qualified central London teacher earns. Much of the rest of his pay was earned over two years rather than one. A large amount of it came from his work on a programme in which he helped other poorly performing schools. Given his exceptional performance, this hardly seems excessive.

Still, Michael Gove, the education secretary, has declared that no headteacher should earn more than the prime minister’s £142,500. But why not? The premier’s current salary is only a down payment on his earning power once he leaves office. There are all those paid speaking engagements, to come, as well as directorships. None of that is available to the retiring headteacher.

Second, David Cameron has been in office only since May. He has yet to prove that he can be even fractionally as effective as Mr Elms or provide anything like the headteacher’s return on taxpayers’ investment.

Think of all those once under­performing pupils that Mr Elms has almost certainly set on a path to productive employment rather than the dole, to contributing to the community rather than being a nuisance to it. The question should not be whether Mr Elms is paid too much but where, at that price, we can find a lot more like him.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

July 25, 2010

WITHOUT the level of technology we have today, how were movies promoted in the past? There were no blogs, Facebook, Twitter or even toy merchandising to create hype about movies back then. But producers still found ways to promote their offerings - ways that the ongoing exhibition at The Cathay Gallery reveals.

Seducing moviegoers: Efforts to evoke public interest depicted at the exhibition include photos of elaborate floats (above) for bigger films such as 'Cleopatra' (1963), and memorabilia such as a gun in a Bible (next) for the 1976 movie, 'God's Gun'

This year, in celebration of its 75th anniversary, Cathay Organisation, one of Singapore's leading leisure and entertainment groups, has put up a temporary exhibition - Box Office Hits: The Magic Of Movie Marketing - in The Cathay Gallery to show the evolution of movie marketing, juxtaposed with the resident exhibition that showcases the evolution of Cathay Organisation over the decades.

Lindy Poh, curator of the exhibition, says: 'It was important for Cathay to showcase the evolution as a self-aware acknowledgement of how fluid, nimble and creative the Cathay team has been over the years. The objects or events that appealed to people of that time reveal the trends of the time - the popularity of a-go-go and cha cha competitions to promote movies, for instance.'

The exhibits consist of freebies that were used to promote movies, such as paper napkins and wax cups with the movie titles and pictures of the actors printed on them; old posters; memorabilia such as a gun in a Bible for the 1976 movie, God's Gun; as well as photos of events held to create awareness and evoke public interest. These include costumed promoters, such as moving mascots for Tempest (1979), human billboards and elaborate floats for bigger films such as Cleopatra (1963).

Ms Poh describes some of the other differences between movie marketing of the past and the present that are highlighted in the exhibition. 'The extent and investment in marketing and merchandising has also changed,' she says. 'It is no longer an aspect that kicks in after a movie is done, but is factored in at a really early stage of movie production. Some estimates tell us that about 5 per cent of expected box-office takings was spent on marketing and merchandising. Now the percentages are phenomenal.'

But even though movie marketing of the past was not as large-scale as the huge advertisements on MRT trains or the infinite number of plush toys of various Pixar characters sold everywhere we turn today, movie promotion during that time was still creative - and, above all, more personal than it is now.

Ms Poh says: 'I have met people who saw the exhibition who thought it was more personal, more imaginative, more 'real'. For myself, it was an eye-opener to see what was done - the promotion efforts were disarming and quirky.'

As the exhibition traces the evolution of movie marketing and the growth of Cathay throughout the past 75 years, it is also a reflection of how the audience has changed during that time. Ms Poh says: 'Movie marketing has evolved because audiences have evolved - effective marketing picks up on how people relate to products, services or events at particular periods of time. The exhibition is not an extensive one but it does track certain shifts in popular culture.'

The Cathay Gallery (#02-16 at The Cathay) is open Mondays to Saturdays, 12pm-8pm, and closed on Sundays and public holidays.